European attractiveness survey 2014

Europe’s 2013 FDI map and rankings

A record year for investment decisions in Europe

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2013 turned out to be a record year for European FDI, with the number of inward investment decisions reaching 3,955 (+5% gain over 2012) creating 166 300 jobs (-2% compared with 2012).

FDI projects reached an all-time high but job creation has not kept pace. In 2013 an FDI project created 42 jobs compared to 60 jobs per project in the pre-crisis years

Top 15 countries by FDI projects

  2012 2013 Share
(2013)
Change
United Kingdom 697 799 20% 15%
Germany 624 701 18% 12%
France 471 514 13% 9%
Spain 274 221 6% -19%
Belgium 169 175 4% 4%
Netherlands 161 161 4% 0%
Russia 128 114 3% -11%
Ireland 123 111 3% -10%
Finland 75 108 3% 44%
Poland 148 107 3% -28%
Turkey 95 98 2% 3%
Switzerland 61 76 2% 25%
Serbia 78 63 2% -19%
Czech Republic 64 60 2% -6%
Denmark 57 58 1% 2%
Others 572 589 15% 3%
Total 3,797 3,955 100% 4%

Source: EY's EIM 2014.


Top 15 countries by FDI job creation

  2012 2013 Share
(2013)
Change
United Kingdom 30,311 27,953 17% -8%
France 10,542 14,122 8% 34%
Poland 13,111 13,862 8% 6%
Russia 13,356 13,621 8% 2%
Serbia 10,302 12,179 7% 18%
Spain 10,114 11,118 7% 10%
Germany 12,508 10,350 6% -17%
Turkey 10,146 8,776 5% -14%
Ireland 8,898 6,895 4% -23%
Romania 7,114 6,157 4% -13%
Czech Republic 5,508 5,609 3% 2%
Bulgaria 4,379 5,505 3% 26%
Hungary 3,941 3,879 2% -2%
Belgium 2,939 3,536 2% 20%
Slovakia 6,299 3,493 2% -45%
Others 20,966 19,288 12% -8%
Total 170,434 166,343 100% -2%

Source: EY's EIM 2014.


Limited changes in the top 15 of FDI destinations

The UK, Germany, France, Spain and Belgium continued to compose the top five recipients of FDI projects on the continent. Together, their share of FDI increased from 59% in 2012 to 61% in 2013.

  • The UK and Germany reached record highs in terms of number of FDI projects (+15%  compared to 2012 for UK and +12% for Germany) and accounted together for 38% of all FDI projects in Europe last year,  compared to 33% in 2011. Their growth was driven by foreign investors’ strategies to access large and wealthy markets.
  • France failed to recover its pre-crisis investment level. At the same time, the country seems to have halted the erosion of its attractiveness to foreign investors. France has secured and reinforced its number one ranking in Europe in terms of manufacturing projects, counting both greenfield and expansion FDI operations.

Despite fragile growth, Western Europe’s midsized markets – Spain, Belgium, the Netherlands, and Ireland – were able to capture 18% of projects and 17% of jobs created by FDI, up from 13% last year. 

  • FDI projects in Spain declined by 19% in 2013, after consecutive increases between 2010 and 2012.
  • Belgium received 175 FDI projects, up 4% from 2012.
  • The Netherlands pulled in 161 decisions in 2013, unchanged from 2012.
  • Finland has improved its appeal to international businesses and captured 108 investments in 2013 (+44%). Finland moved up 3 spots to 9th place in 2013 rankings

Suffering from sluggish growth and unstable economic conditions, FDI projects in CEE declined by nearly 5%, while job creation fell by 4%. 

  • Turkey was an exception to this decline with 98 projects started (up from 95 in 2012).  Affirming itself as Europe’s new hotspot for large manufacturing projects, the country drew several large investments in the automotive sector. 
  • Russia managed to regain its top position in the CEE region, with 114 FDI projects (-11% compared to 2012).
  • In Serbia, job creation increased by 18%, despite a 19% decline in FDI projects, making the country the 5th largest recipient of FDI jobs in Europe in 2013.
  • Poland attracted 107 projects in 2013, making for a year-on-year decline of 28%.  FDI job creation, however, increased by 6%.
  • In the Czech Republic, FDI projects were down 6% from 2012, while job creation remained stable (2%).
Europe’s global cities: a new attractiveness magnet
London, Paris, Berlin, Frankfurt and Munich are the top five European cities for investment destinations.

Europe’s balanced mix of sectors and activities

EY European attractiveness survey 2014 - Top activities by FDI job creation

  • In 2013, sales and marketing offices (i.e., corporate representative  offices of regional, national or international reach) made up for almost 50% of the total FDI projects in Europe – although they  declined by 2% over the course of the year.
  • The manufacturing function attracted 26% of the total FDI projects, up by 4.7% from the previous year. It accounted for more than half of the jobs created on the continent.
  • FDI projects in the R&D function increased in 2013 by 23%. The UK (22% of FDI R&D projects), Germany (18%) and France (16%) were the three largest recipients of R&D investments in 2013. Job creation from R&D-oriented FDI projects in Europe increased by a stark 64%.
  • Business services and software continued to be the number 2 FDI sectors, together accounting for 25% of the total FDI investment decisions in Europe in 2013.
  • The pharmaceutical sector attracted 141 FDI projects, up 58% from 2012. More than 40% of these were manufacturing projects.
  • In 2013, the automotive industry in Europe attracted 6% of the total FDI projects (-10% from 2012). It made up nearly 30% of the job creation.  Western European countries re-emerged as the leading recipients of automotive projects in 2013.

Sources of FDI: rapid-growth economies more bullish on Europe

  • The US continued to be the single leading investor in Europe, accounting for approximately a quarter of inward investment projects and job creation in 2013 : 1,027 projects (-2%) creating 38,718 jobs (+0.5%). 
  • As a whole, intra-European investment accounts for more than 50% of FDI in Europe (+4% compared to 2012). However job creation from these projects declined by 12%.
  • In 2013, Europe attracted 313 projects from companies based in the BRICs, an increase of 28% from 2012. Job creations from these investments also increased of 37%, to reach 16,900 jobs.  China is the leader among BRIC investors, with 153 FDI projects (49%) creating 7,135 jobs.